The Biden administration has entered into an incomprehensibly foolish and dangerous sub-sea Nord Stream 2 pipeline approval deal with Germany which affords an enormous economic gift to Russia at the expense of American natural gas exports, bypasses an existing land route which will isolate and cut off Ukraine, and threatens European energy security.
Nord Stream 2 will run under the Baltic Sea to connect between the Port of Ust-Luga in northwestern Russia and Greifswald in northern Germany. In doing so, the $11 billion pipeline will likely double direct Russian natural gas exports to Germany.
None of the numerous reasons for objections to the deal are obscure or new.
The Obama-Biden and Trump administrations both opposed the project on grounds that it would strengthen Vladimir Putin's economic and political sway over Europe through control and weaponization of reliable energy supplies.
Russia has previously cut deliveries of the fuel to Ukraine and parts of Europe in winter during pricing disputes.
As recently as six months ago, even President Joe Biden recognized the European threat posed by the Russian pipeline, asserting that his administration would review sanctions placed upon the project by the Trump administration.
"We continue to believe, the president continues to believe, that Nord Stream 2 is a bad deal for Europe," White House Press Secretary Jen Psaki told a daily briefing, adding that the administration "will be reviewing" the restrictions included in the defense policy legislation.
Restrictions in the annual defense policy bill that passed on Jan. 1 included sanction measures that apply to any companies helping Gazprom — the Russian state energy company leading the project — to lay pipeline, to insure vessels, or to verify equipment.
The Biden administration’s decision to drop those sanctions accompanies an ironically paradoxical action that killed the Keystone XL pipeline at the Canadian border, along with about 11,000 U.S. jobs and 830,000 barrels of oil per day that it would have provided.
This ironically occurred during a time when Europe has also been investing extensively in liquid natural gas import terminals that can support highly competitive U.S. export markets and leverage lower LNG prices from Gazprom.
Other than Germany, Austria and the Netherlands, most European nations oppose Nord Stream 2 and the added transatlantic security influence it will cede to Moscow.
In February, France stated its opposition to the pipeline following Putin’s imprisonment of opposition leader Alexei Navalny. And in March, foreign ministers of Poland and Ukraine jointly called on President Biden to “use all means at his disposal to prevent the project from completion.”
Nord Stream 2 will have highly destabilizing and economically destructive impacts upon Ukraine, depriving the bypassed fledgling democracy of billions of dollars in transit fees as Russian natural gas is diverted from routes that run through its territory.
This is money needed by Kyiv to defend itself in an ongoing Russian-supported war in Ukraine’s Donbas region.
Relations between Kyiv and Moscow collapsed after Russia’s annexation of Crimea in 2014 and support for separatist forces battling Ukrainian troops in eastern Ukraine.
Biden’s capitulation to Germany now comes as a further blow to Kyiv as it struggles to convince Western allies to accelerate Ukraine’s entry into the NATO military alliance following a troop standoff with Russia earlier this year.
Ukraine Foreign Minister Dmytro Kuleba has stated: “This decision has created political, military and energy threats for Ukraine and Central Europe, while increasing Russia’s potential to destabilize the security situation in Europe, perpetuating divisions among NATO and European Union member states.”
Kuleba, also a member of Ukraine’s National Defense and Security Council, also added in a joint statement with his Polish counterpart, Zbigniew Rau, that: “Unfortunately, the hitherto proposals to cover the resulting security deficit cannot be considered sufficient to effectively limit the threats created by NS2 [Nord Stream 2].”
So exactly what real benefits do America, Europe or Ukraine get out of the deal?
Michael McCaul, the top-ranking House Republican on foreign affairs, has characterized Nord Stream 2 as "a Russian malign influence project that threatens to deepen Europe's energy dependence on Moscow, render Ukraine more vulnerable to Russian aggression, and provide billions of dollars to Putin's coffers."
Even a member of the president's own party, Senate Foreign Relations Committee chairman Bob Menendez, has said in a statement: "I urge the administration to rip off the Band-Aid, lift these waivers, and move forward with the congressionally mandated sanctions."
Recall also that central Obama administration official Secretary of State Antony Blinken had previously stated during his confirmation hearing: "I am determined to do whatever we can to prevent that completion" [of Nord Stream 2].
As assessed by Wall Street Journal editors, “the deal with Germany is embarrassing in its weakness.”
A joint U.S.-German statement only pledges to impose sanctions in the future “should Russia attempt to use energy as a weapon or commit further aggression against Ukraine.”
Even then, a U.S. request for a so-called “kill-switch” clause enabling Berlin to suspend gas flows in the event of Russian aggression toward its neighbors or Western allies, wasn’t included.
This travesty deal which was negotiated with lame-duck Chancellor Angela Merkel will give Russia power over Europe’s economy at the same time Biden moves to restrict U.S. fossil fuel production.
Meanwhile, according to a joint statement issued by governments of the U.S. and Germany, “Germany commits to establish and administer a Green Fund to support Ukraine’s energy transition, energy efficiency, and energy security.”
This amounts to a piddling commitment of about $175 million for developing so-called “renewable energy,” along with about $70 million to promote Ukraine’s unspecified energy needs, in compensation for billions in lost Russian surface pipeline transit fees.
Although German and U.S. officials have urged Russia to maintain enough gas transit through Ukraine to keep the country’s pipeline profitable and operational by extending a 2019 transit agreement with Gazprom that expires in 2024, good luck with getting any assurances that any such commitment will be bankable.
Timing for Biden’s inexplicable lifting of the Nord Stream 2 sanctions is even more bizarre having occurred just a couple of months following a Russian-origin May ransomware cyberattack on the Colonial Pipeline which left thousands of petrol stations across the U.S. southeast with fuel shortages.
Nevertheless, none of this has inhibited the Biden administration in handing Vladimir Putin a costly uncompensated gift at enormous expense to American, European and Ukrainian economies and energy independence.
Larry Bell is an endowed professor of space architecture at the University of Houston where he founded Sasakawa International Center for Space Architecture and the graduate space architecture program. His latest of 10 books, "What Makes Humans Truly Exceptional," (2021) is available on Amazon along with all others. Read Larry Bell's Reports — More Here.
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